5 days stock rally

[tripods68]

Don't me wrong, i like this to go up. i'm 100% up on BAC.

Anyone think this will V shape recovery or L shape?

[Broken Arrow]

I know you're not implying this, but I don't know for sure that what we are looking at is indeed a recovery.... However, as we have all said for quite some time, some of the biggest market gains to be made will be in the formative days during a bear market rebound.

The thing is though, as far as I can tell, the main catalyst for this rally is essentially Vikram Pandit leaking a memo stating that they've been profitable for 2 months. And somehow, this got the market abuzz, due to the overwhelming fear of nationalization. A mixture of other positive news helped fuel and support this rally into the 5-day that we are currently seeing now.

However, does that mean the economy finally turned around? I don't think it has. Fundamentally speaking, the housing market has yet to pick up, national job loss is at nearly double digits, and is expected to increase some more through the year, and the second stimulus package has yet to go full steam ahead....

So.... I don't know. My question isn't so much what the recovery will look like, but rather, whether this particular rally is actually sustainable.... And while I would love to be wrong on this, I don't think it is.

[tripods68]

I think it would be sustainable when the market are close to "unwinding" those toxic debts and when banks begins lending "normally" to each other again.

[Broken Arrow]

Originally Posted by tripods68

I think it would be sustainable when the market are close to "unwinding" those toxic debts and when banks begins lending "normally" to each other again.

Yes, that's another indicator worth looking at, and last I've heard, we have yet to even have any takers willing to jump into that pool....

[Russell]

So the question is, any of you guys sell and make a profit in the last 5 days? I'm so close to selling the $7k worth of VTSMX I bought at $16.43 but I can't make up my mind, on the one hand the returns are low but at least I make some money.

[tripods68]

Originally Posted by Russell

So the question is, any of you guys sell and make a profit in the last 5 days? I'm so close to selling the $7k worth of VTSMX I bought at $16.43 but I can't make up my mind, on the one hand the returns are low but at least I make some money.

No. But I put "trailing stop" on BAC to protect some profit in case it head south.

[noppenbd]

In the short term the rally seems to be in danger of losing steam, and some sort of pullback seems due. Whether the pullback will just be a small pullback or a true down leg with a retest of the 666 S&P 500 low is the big question. My guess is we are going to retest 666 this month. Of course no one knows for sure.

[Broken Arrow]

I haven't sold my trading position yet. It's up, posting a gain, but I'm going to wait until the end of the day and see how the intra-day action looks. Volatility has a tendency to go up by the end of the day, but technicals suggest the rally could sustain at least until the end of today, so that's why I'm waiting.

And if it doesn't pan out? Well no biggie.

[noppenbd]

I really like chart 1.1.7 on this page:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2393449&cmd=show[s157911977]&disp=O

[Russell]

Hmm, looks like selling VTSMX comes with several strings attached. One since it's a fund I can't put a trailing stop on it, I get what the market will pay for it so no way to protect myself. Two, Scottrade says since I held it for less than 90 days they'll charge me another $17 in addition to the $17 trade fee. Then they also warn that selling in and out of mutual funds can make Vanguard ban me from future purchases...jeez, enough fine print to make me say that $800 - taxes is probably not worth all this just yet.

I'll have to pick up a few stocks to trade.

[noppenbd]

Just another reason to use ETFs for this kind of trading.

[Broken Arrow]

Yeah, VTI if you plan to trade in and out like that.

[tripods68]

The market is retreating. DOW up 34 with only 20 minutes left remaining. I'm still lock and load

[noppenbd]

Beware, bearish shooting star candlestick forming today. Looks like the pullback will start tomorrow. No saying how far it will pull back though.

[Broken Arrow]

Hehe, yeah, boy was I wrong about the techicals (but that's what it looked like at the time, as though it could make a breakthrough). Oh well, no matter. I was already out by the time the slippage became clear.

[Russell]

Oh well, time to buy more stocks and wait until the next rally.

So what are you guys buying? I heard BAC, GOOG even C in the last few threads. We should start a thread "Investing in 2009".

[noppenbd]

I bought PSQ today (Short NASDAQ ETF). I'm hoping for a big gap down tomorrow, at least on the NASDAQ. Looks like money was moving into safety today (Consumer Staples, Transports, Utilities). I expect it to continue at least tomorrow.

[Broken Arrow]

Originally Posted by Russell

So what are you guys buying? I heard BAC, GOOG even C in the last few threads. We should start a thread "Investing in 2009".

I didn't buy anything. For trading, I've now gotten to a point where I will just sit on cash until I see a really good deal that suggests the upside out-weighing the downside.

As a swing trader anyway, I believe that the quality of the trade is more important than the quantity of the trade. In fact, it is theoretically possible to make 30% to 50% gains on a single good trade if you can manage to "time" it right somehow. Now, to actually do that is a different story, but at the very least, you want to have the cash at the ready to make the buy when the opportunity comes up.

Let me also add that it's equally possible to lose 30% to 50% capital on such trades as well. But that's all the more reason why I make each and every one of these trades the best that I possibly can....

Oh, and one last thing: I'm afraid what we are doing here, trading, is not investing. Buying and selling, in and out, attempting to time the market even though I myself believe that it ultimately can not be done....